WoodWeek – 7 June 2017

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Greetings from your WoodWeek news team. Thanks to the team at Champion Freight we've got the latest log export statistics for you. New Zealand's terms of trade rose to the highest level in about 44 years in the first quarter as export prices rose more than three times faster than imports, led by dairy and forest products.

It's opportune that the HarvestTECH 2017 conference takes place this month, highlighting the latest innovations in forestry, because the way we harvest trees on steep slopes, shift, sort and stack logs and then transport the wood to the mill or port is about to undergo dramatic changes under a plan proposed by Forest Growers Research. To see what’s planned see the special feature in the June issue of NZ Logger magazine.

Industry lending leaders, ANZ Bank’s UDC Finance unit, lifted first-half profit 11 percent as it prepares for its sale to China's HNA Group. Net profit exceeded $30 million in six months to March 31, up from $27.3 million a year earlier. Revenue was flat at $60.4 million.

Moving to the environment, the Government has added a further $3.3 million for eight climate change research projects – four of which are in forestry.

Finally, after years of investment in Uruguay, this week Weyerhauser announced an agreement to sell its timberlands and manufacturing business there to a consortium led by BTG Pactual's Timberland Investment Group (TIG), for more than $US400 million.

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Record high trade led by dairy and forestry

NZ terms of trade rises to 44-year high as dairy, forestry drive up export prices - New Zealand's terms of trade rose to the highest level in about 44 years in the first quarter as export prices rose more than three times faster than imports, led by dairy and forest products.

The terms of trade rose 5.1 percent in the first quarter, Statistics New Zealand said, beating the 3.9 percent increase forecast by economists in a Reuters survey. Export prices rose 9 percent in the first three months of the year and import prices gained 2.7 percent. Terms of trade is a measure of the purchasing power of New Zealand’s exports abroad. The latest rise means 5.1 percent more goods imports could be funded by a fixed quantity of goods exports than in the December 2016 quarter.

The terms of trade provides a more detailed reading of the flow of goods and services across the border than the monthly merchandise trade series because it shows how much changes in the value of exports and imports is driven by price and how much by volume. The value of exports rose 3.4 percent to $11.8 billion, seasonally adjusted, in the first quarter, while the value of imports rose 6.2 percent to $13.2 billion but export volumes fell 4.2 percent while import volumes rose 1.2 percent.

"The terms of trade sit just 0.3 percent below the record high set back in June 1973. And with export prices still very healthy over recent months, we expect it is only a matter time before a new record is set," economists at ASB Bank said in a note.

Dairy led the gain in export prices, jumping 18 percent in the first quarter as milk powder rose 20 percent, butter gained 23 percent, and cheese rose 8.8 percent. Dairy prices are 34 percent higher than the recent low of September 2016, but are still 21 percent lower than the March 2014 high, Stats NZ said. Dairy values rose 1.2 percent in the March 2017 quarter to $3 billion, while the seasonally adjusted dairy export volumes fell 11 percent, to the lowest level since the September 2013 quarter.

Forest product export prices rose 11 percent in the March quarter, led by a 15 percent gain from wood, to reach their highest level since the series began, and topping the previous record set in September 2000 by 1.5 percent, Stats NZ said. Seasonally adjusted forestry product volumes fell 6.1 percent, to their lowest level since the March 2012 quarter. Seasonally adjusted forestry product values fell 0.4 percent to $1.3 billion.

Petroleum and petroleum product prices, which aren't seasonally adjusted, led the gain in overall import prices. They rose 11 percent in the March 2017 quarter, and 46 percent for the year to March 2017. Import volumes fell 1.2 percent in the March 2017 quarter, and values rose by 9.7 percent. Stats NZ said a three-week shutdown at the Marsden Point refinery influenced the data.

Michael Gordon, acting chief economist at Westpac Banking Corp, said import prices were "up across a broad range of categories, suggesting a little more imported inflation pressure than we expected over the quarter. Notwithstanding the latest increase, though, import prices have been on a downtrend for several years now."

The terms of trade with China rose 5.3 percent, and for Australia it rose 0.6 percent, and for the US recorded a 0.5 percent gain.

The services terms of trade rose 0.1 percent in the March 2017 quarter, with prices for services exports up 1.1 percent, led by 1.2 percent gain for travel. Prices for services imports also rose 1.1 percent.

Source: BusinessDesk via Scoop

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Champion Freight Export Report - June 2017

Thanks to the great team at Champion Freight we've got the latest log export market activity update for you in a series of very clear and self-explanatory charts.

Click the graph to download the PDF of Champion Freight's latest report.

Click here to visit the Champion Freight website for further information.

Source: Champion Freight

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More money for research of climate change

Another $3.3 million for climate change projects - Primary Industries Minister Nathan Guy and Associate Minister Louise Upston have announced $3.3 million in new funding for eight climate change research projects in the agriculture, horticulture and forestry sectors.

The research projects were approved by the Ministry for Primary Industries under its Sustainable Land Management and Climate Change (SLMACC) research programme.

“This funding plays an important part in helping our primary industries prepare for the future challenges of climate change,” says Mr Guy.

“The information we obtain through these research projects help us better understand the effects that climate change has on our primary sectors, and to make informed decisions for the future.

“There is a high calibre of research projects approved for funding. For example, AgResearch will be looking at the energy efficiency of livestock agrifood products through their lifecycle to overseas markets. Another project will look at the potential impact of climate change on where different horticultural industries are based.”

Four of the eight projects involve the forestry industry.

“In one of these projects, Landcare Research New Zealand will be looking at the best options for land use following radiata pine harvesting in the Gisborne District, and looking at the potential of less common forest species for off- setting greenhouse gas emissions,” Ms Upston says.

“Forestry is one of New Zealand’s largest and cheapest forms of carbon storage and will play a major role in adapting to climate change. These projects have an important role in building our knowledge and preparing for the future.”

A full list of successful projects receiving funding through SLMACC is available at http://mpi.govt.nz.

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NZ Logger - The New Future of Forestry

It's opportune that the HarvestTECH 2017 conference takes place this month, highlighting the latest innovations in forestry, because the way we harvest trees on steep slopes, shift, sort and stack logs and then transport the wood to the mill or port is about to undergo dramatic changes under a plan proposed by Forest Growers Research. To see what’s planned see the special feature in the June issue of NZ Logger magazine.

June is usually reserved for the magazine's quarterly focus on the New Zealand milling and processing sector, but this month it has been usurped by the Aussies in a fascinating look at an operation that retrieves wood from a hydro lake in Tasmania and turns it into stunning timber for bespoke furniture, floors and fittings - something readers will be able to see more of at HarvestTECH 2017.

Plus much more, in the June 2017 issue of NZ Logger, now on sale at selected service stations, or to subscribe for either the printed version and/or the digital version, visit www.nzlogger.co.nz.

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UDC Finance half-year profit up

ANZ Bank New Zealand's UDC Finance unit lifted first-half profit 11 percent as it prepares for its sale to China's HNA Group,

Net profit rose to $30.2 million in the six months to March 31, from $27.3 million a year earlier. Revenue was flat at $60.4 million, and the company said the profit growth was "driven by low provision charges and lending growth across a range of industries." Full accounts have not been published, with the only details available on a one-page statement.

ANZ announced the planned sale of UDC in January. The deal is subject to various approvals and is expected to be completed late in the second half of the year, and will deliver a net gain to ANZ of A$100 million. The sale price was $235 million above UDC's net assets, or a price-to-book ratio of 1.6 times, at the point it was announced.

UDC's loan book expanded to $2.73 billion as of March 31 from $2.48 billion a year earlier. Bad debt provisions dropped 61 percent, the company said.

"We’re well positioned as we move into a new period of HNA Group ownership, which will bring more growth and investment to UDC," chief executive Wayne Percival said. "UDC is experiencing growth in lending to vital sectors including transportation, construction and forestry."

Hainan, China-based HNA, which evolved from a regional airline to a global conglomerate with more than US$90 billion of assets, plans to preserve UDC's existing operations, keeping all staff and customers, it has said.

Interim performance highlights:
  • Net half-year profit after tax of $30.2 million
  • Revenue solid at $60.4 million
  • Total lending reaches $2.73 billion
  • Provision expenses down 61%

Source: BusinessDesk + Scoop

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Weyerhaeuser selling southern timberlands

This week Weyerhauser announced an agreement to sell its timberlands and manufacturing business in Uruguay to a consortium led by BTG Pactual's Timberland Investment Group (TIG), including other long-term institutional investors, for $402.5 million in cash. The company anticipates it will incur minimal taxes in conjunction with the transaction.

The transaction includes over 120,000 hectares of timberlands in northeastern and north central Uruguay, as well as a plywood and veneer manufacturing facility, a cogeneration facility, and a seedling nursery.

"Our Uruguay business is a unique combination of high-quality timberlands, value-added manufacturing operations and skilled and dedicated people, and this transaction will best position the business to reach its full potential," said Doyle R. Simons, president and chief executive officer. "I am proud of the contributions our Uruguay employees have made to the success of Weyerhaeuser and the contributions they will make to the future success of these operations."

The transaction is subject to customary purchase price adjustments and closing conditions, including regulatory review, and is expected to close in the fourth quarter of 2017. Weyerhaeuser Uruguay and the buyer consortium will continue to operate separately until the transaction closes.

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Funding secured for innovative tree growth & monitoring system

Irish specialist software developer Treemetrics has won a €1.2 million contract from the European Space Agency (ESA) to provide a system for tracking tree and forest growth.

The Cork-based company has developed a system using satellite technology that allows forestry owners and investors to accurately measure and record the growth of their assets over time rather than estimating them.

Treemetrics confirmed that it has agreed a deal worth €1.2 million with the ESA under which its technology will feed data on forest growth and development into the agency’s satellite communications systems. The news comes shortly after the business agreed a €1 million deal with State forestry company, Coillte, that will help make its harvesting operations more efficient.

The agreement will ultimately provide forest owners with real-time information on the progress of their investments, tackling a key issue for investors, who up to now had to rely on estimates, according to Treemetrics chief executive Enda Keane.

The company has developed sensors that are strapped to trees. Once a month they broadcast information on rate of growth and maturity to a network which can then be communicated via satellite. The system gives clear data on trees’ and forests’ development.

European taxpayers support the ESA, which is required to use its systems to provide economic and other benefits. “It’s significant that a small Irish company can actually engage with a major agency to develop systems to help it with its work,” Mr Keane noted.

Treemetrics agreed a €1 million contract with Coillte last month. It will connect its system directly with the State company’s harvest-cutting machines, giving drivers mapping and positioning information. The technology will help reduce waste, increase efficiency and improve environmental sustainability, the company said.

Mr Keane and his colleague Garrett Mullooly set up Treemetrics in 2005 as they believed that there was a need to use new technology to replace old forestry management systems. The company has customers in 16 countries.

TreeMetrics plan to be at the Elmia Wood Show next week in Sweden at stand 913. If attending, attached is a handy map of their location at the Show.

Source: www.irishtimes.com, Photo: Treemetrics

For more information on the The Internet of Tree’s technology, click here.

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Chinese construction company endorses wood

Here's today's eye-opener, once again brought to you by those annoyingly subsidised Canadian wood people.

The largest construction company in the world, The China Construction Group (CCG) has used light wood frame construction in the past. However, up until now, the mammoth corporation has remained relatively quiet about the new-in- China technology. However, on April 20, 2017 the silence was broken as CCG reached out to the China Civil Engineer Society (CCES) and organized a promotional event that saw three hundred and twenty professionals visit the Tianjin BSD-TEDA eco-city project, the highest profile wood-frame project in China.

Canada Wood China’s Steve Ross was on hand to introduce the wood-frame system with the aid of a number of construction mock-ups showcasing wall, floor and truss systems. The flavour of the day was cost effective, prefab-able, green technology! At the conclusion of the event, several construction professionals voiced their appreciation for the event as well as the desire to visit additional wood projects throughout China.

Source: Canada Wood Today

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Powell joins seedEnergy

Dr Mike Powell joins seedEnergy - Dr Powell is well known to many in the Australasian Forest Industry, having an esteemed career in radiata pine breeding for the Southern Tree Breeding Association during the early 2000's covering the development and implementation period for TREEPLAN®.

Prior to that he was with North Eucalypt Technologies and the Tree Breeding Section of the Queensland Forest Service. Mike has been appointed as seedEnergy’s Production Manager at Mount Gambier and will be leading the company's radiata and globulus programmes.

General Manager for seedEnergy, Barry Vaughan explained “We’re thrilled to be able to deploy STBA’s high quality breeding program under the guidance of someone of Mike's skill and experience."

Photo: Mike Powell

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Million trees for Auckland says Mayor Gough

Million Trees project unearths partners to plant 170k trees and shrubs in first year - This week Auckland Mayor Phil Goff launched Million Trees, a programme for greening Auckland which will plant a million predominantly native trees and shrubs across the region over three years.

At a launch event hosted by Wesley Intermediate School, the Mayor and local children planted trees and shrubs in the Oakley Creek catchment and revealed Million Trees partnerships with Department of Corrections and Trees That Count that will help put 170,000 plants in the ground in the programme’s first year.

The launch also opened Te Whangai Trust nursery which will be donating trees and plants to the Mayor’s programme and the Mayor announced the first tranche of plantings for 2017 allocating 30,000 trees for both the North West Wild Link and Puhinui projects, 25,000 trees and shrubs for Atiu Creek on the north Auckland border and 15,000 plants for both the Whau River project and Project Twin Streams in Henderson.

Million Trees formed a key part of Phil Goff’s mayoral campaign. It seeks to make Auckland a greener more beautiful place while providing carbon sinks to offset greenhouse gases and prevent siltation of Auckland’s harbours and waterways by planting along streams and coastal areas.

“Million Trees is an ambitious programme to green our city, offset our carbon emissions, protect our water quality and improve our living environment,” says Mr Goff.

“The response to Million Trees has been fantastic. The enthusiasm and energy of Council, local boards, the private sector and schools has been overwhelming. We are partnering with Department of Corrections, Trees That Count, and nurseries, communities and other organisations to green our city and deliver a natural asset to Aucklanders for generations to come.

“The million trees project is about involving all of our community in making Auckland a better place to live and enhancing our living environment.”

Corrections Northern Regional Commissioner Jeanette Burns says, “We are pleased that offenders can be involved in this valuable project and give something back to the community.

“Community work offenders do unpaid work in the community to pay something back for the offence they have committed. It also gives them an opportunity to take responsibility for their offending and learn new skills and work habits.

“Employment opportunities give prisoners the chance to develop work habits and gain skills and qualifications that will lead to sustainable employment and contribute to our goal of reducing.”

Sir Stephen Tindall, co-founder of The Tindall Foundation (which funds Trees That Count), encourages Aucklanders to get involved.

“We see our valued partnership with the Council as a way not only of getting a million additional trees and shrubs into the ground, but also as a springboard to encourage the participation of all Aucklanders in planting more native trees in their neighbourhood, on their farm, at school or outside their office. Planting native trees is one of the best things we can all do for the local environment and for the planet. It is also a great way to bring people together and connect them with their local community,” says Mr Tindall.

Partnering to green Auckland

The partnership with the Department of Corrections will deliver nursery space for growing trees and shrubs. Prisoners and offenders serving sentences of community work in the Auckland region will assist with site preparation, planting and maintenance.

Trees That Count will assist with planting trees and undertake a robust and independent running count of the trees delivered within the programme.

Mr Goff says, “The partnership with the Department of Corrections is crucial. It gives us the scale required to meet the Million Trees target, and having Trees that Count on board will ensure we are accurately reporting what we deliver.”

Mayor Phil Goff was joined by representatives from the Department of Corrections, Trees that Count, Te Whangai Trust, Wesley Intermediate School and the local community to plant trees in the Oakley Creek catchment in Mt Roskill.

Wesley Intermediate also commemorated the occasion with a 100 metre long mural designed by its pupils depicting the Million Trees programme and other local environmental community initiatives. The mural can be seen by the public by visiting Mt Roskill’s War Memorial Park.

Find out more here: milliontrees.co.nz

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Buy and Sell

... and finally ... Toughest time of my life

Jut recently I've had the toughest time of my life.

First, I got angina pectoris and then arteriosclerosis.

Just as I was recovering from these, I got tuberculosis, double pneumonia and phthisis.

Then they gave me hypodermics.

Appendicitis was followed by tonsillectomy.

These gave way to aphasia and hypertrophic cirrhosis.

I completely lost my memory for a while.

I know I had diabetes and acute ingestion, besides gastritis, rheumatism, lumbago and neuritis.

I don't know how I pulled through it. It was the hardest spelling test I've ever had."

That's all for our mid-week wood news roundup.

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John Stulen
PO Box 1230
Building X91, Scion Campus, 99 Sala Street
Rotorua, New Zealand
Tel: +64 27 275 8011
Web: www.woodweek.com

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